If you filed a Michigan return with non-resident shareholders, partners or members, you may have recently received a notice from Michigan regarding the new required 2012 Flow-Through Withholding Quarterly Return. Quarterly returns (Form 4917) and withholding on estimated Michigan apportioned income is now required of all pass-through entities with non-resident owners.
Entities that have no Michigan distributable income or have less than $1,000 per quarter should file a Zero quarterly return. An Annual Withholding Reconciliation Return is due February 28, 2013.
All pass-through entities, including those with no non-resident shareholders, are receiving this notice (in an attempt to catch withholding violators). A quarterly return is required of everyone who received the notice unless the entity files a Notice of Change or Discontinuance.
We have asked about penalty assessment for non-compliance if no tax is due and the quarterly form is not filed. We did not get a yes or no response. We were told it was a good question and that they would look into this since the compliance rule is so new. We will let you know as more information becomes available.
Please post a comment here if you have any questions.